Taxation of French-sourced dividends: confirmation of the Supreme Court decision


On 17 December 2019, the Court of Appeal of Antwerp confirmed the position of the Court of cassation in its arrest dated 16 June 2017 (previously commented) with respect to the application of a foreign tax credit in Belgium in relation to French-sourced dividends received by Belgian private investors.


The case concerned French-sourced dividends which, today, are normally taxed at a rate of 15% in France before being taxed in Belgium at a rate of 30%, resulting in an overall taxation of 40,5%.

In its judgement dated 16 June 2017, the Belgian Supreme Court decided that the foreign tax credit mechanism provided in the Double Tax Treaty concluded between Belgium and France should be available to Belgian private investors, despite the fact that such mechanism has been abolished in Belgian tax law in 1988. Indeed, the Court has considered that the position of the tax administration and the national court is in breach with the principle of supremacy of international treaties.

The application of the foreign tax credit could result in a taxation lowered by maximum 12,7%.

Please note that the reasoning of the Belgian Supreme Court was already followed by the Court of Appeal of Brussels in another case. Indeed, the Court decided to grant the tax credit to a private investor who received French-sourced dividends. We note however that appeal has been lodged by the Belgian tax authorities before the Belgian Supreme Court.

What’s new?

The Court of Antwerp follows the arguments of the Belgian Supreme Court and refers to the general principle of the primacy of international law over national law to condemn the position of the tax authorities. In this respect, it is not possible for the tax authorities to invoke the abolition of domestic regulation when a tax treaty provides the application of the foreign tax credit to Belgian private investors.

The decision of the Court of Appeal of Antwerp was awaited since the tax authorities had decided to wait for the decision before granting the foreign tax credit in comparable cases.

Taxpayers could also envisage claiming the refund of taxes unduly supported on French-sourced dividends received since 2016 (i.e. 5-year statute of limitations as from the 1 January of the year during which the tax has been supported).

What’s next?

Belgian private investors and taxpayers subject to the Belgian tax on non-profit entity should consider claiming the benefits of the foreign tax credit on French-sourced dividends, also for dividends received since 2016.

Of course, PwC remains available to provide its assistance on this matter.